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Outrageous Predictions 2017 is out! In this call, high-yielding bond default rate spirals to 25% from less than an average 4% as the failure of central-bank policy leads to a mighty reckoning in the corporate space.

Argentina: The central bank left the benchmark rate at 26.75%. Indicators continue to show inflation is slowing toward the central bank’s expectations in coming months, the Argentine central bank says in e-mailed statement.

Despite a clear slowdown in inflation in recent months, the central bank's August survey showed expectations for 2017 CPI are above target of 12% to 17% .

Foreign exchange

It was a very quiet session overnight despite the small selloff in EURUSD following the European Banking sector worries but the pair is still within the same range.

GBPUSD started the day really offered but didn’t manage to close below 1.3000 which remains the strong support.

A false break in USDCAD, which failed to close above the 200 Day Moving Average at 1.3235 and is back to the range. Only a confirmed break above the 200 DMA would trigger strong buying interest.

In emerging markets, USDMXN was the best performer after the Clinton–Trump debate and dropped 2.8% on the hope that Clinton had taken an advantage in the US elections.

Very offered tone in USD in Asia with USDKRW down more than 1% on exporters' month end flows and pick up in the tax amnesty in Indonesia pushing the pair lower and breaking the 13000 level in spot.

USDCNH curve remained well offered with T/N trading at -2 and locals selling the 1 year forward.

Rates: Oil prices have fallen on the back of there being an unlikely deal in Algeria and the growing concerns and negativity on European banks strengthen demand on government bonds as German 30-year bunds yielded 0.42% on Tuesday.

US 10-year Treasuries closed 2.6 basis points to 1.558% while the US 2-year had subdued gains and closed 0.1bps higher to 0.746%.

Credit: The pressure that Deutsche Bank is facing has triggered some delays in corporate bonds selling. NordLB, one of Germany’s five remaining big Landesbanken, postponed the sale of a seven-year senior unsecured bond.

NordLB, which is under pressure given its exposure to the shipping market, told investors that “due to current market conditions” it had decided not to go ahead with the sale of the bond but added that it would “re-engage” with investors in future.

The cancellation followed Lufthansa, the German airline, pulling a bond sale on Monday, also citing market conditions. (Source: Financial Times).

Commodities

Equities

US stocks regained ground after first presidential debate which seemed to give the market a 'Clinton relief rally’, countering weakness in energy sector dragged by oil price slump.

The S&P 500 bounced 0.6% to 2,159.93 with tech sector (+1.2%) leading the rise. Nike was up 1.7% in anticipation of better first quarter earnings per share. After market it reported first quarter earnings per share of $0.73 higher than the markets estimate: $0.56, on revenue of $9.06 billion .

European stocks close narrowly higher as Deutsche Bank rebounded amid hope of lower claim from the US Justice Department, however energy stocks weighted in the market.

The STOXX 600 index inched up 0.19 to 340.19 while the oil index lost 1.4%. In London the FTSE 100 edged down 0.15% to 6,807.67, with British retail sales fell unexpectedly in September.

Deutsche Bank erased morning losses and closed up by 0.6%, after the US Justice Department's third highest-ranking official said banks can lower penalties by co-operating with authorities.

Volkswagen slid 2.6% on reports that Germany was vetting a criminal fine that would bankrupt the firm.

On top of her brief: Hillary Clinton's performance has assured markets. Photo: iStock

– Edited by Adam Courtenay

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